"Is the Multiple Authors option WP has a potentially similar thing."
Same, but different. There is no "user diary" component per se to be found in WordPress. Each author would have the same posting privileges for the blog.
"Can I assign posting priveleges to some/all users but have their posts pubished on another page?"
That all depends on what you mean by "another page." First, WordPress does allow for different privileges based on the user role assigned. More on that can be found here:
As for this different page thing, you could restrict posting to a specific category for authors using a plugin like:
and then remove that category from your main blog page.